Frequently Asked Questions on Bitcoin and Crypto

For beginners, we recommend two options:

• Coinbase — very simple interface, ideal if you have no experience. Higher fees (0.5-2%) but guided process for purchases in your currency.
• Binance — lower fees (0.1%), more features, slightly more complex. The world's largest exchange by volume.

Both support bank transfers and credit cards for deposits.

There is no minimum requirement. You can purchase Bitcoin starting from €10 on almost all major exchanges. Bitcoin is divisible into 100 million units called satoshis, so you can own tiny fractions.

The general advice is to start with an amount you're willing to lose completely — to familiarize yourself without stress with the platform and market.

KYC stands for "Know Your Customer". It's a mandatory legal procedure requiring user identity verification through:

• Government ID (passport, driver's license, national ID)
• Selfie with ID
• Sometimes: proof of address (utility bill, bank statement)

Exchanges are required to perform KYC to comply with anti-money laundering (AML) and anti-terrorism regulations. Without completed KYC, deposit and withdrawal limits are very low or non-existent.

There are several ways to purchase Bitcoin with euros:

• Bank Transfer (SEPA) — low fees (0-0.1%), takes 1-3 business days
• Credit/Debit Card — instant, higher fees (1.5-3.5%)
• PayPal — available on some exchanges (Coinbase, eToro), average fees
• Google Pay / Apple Pay — available on Binance, instant

For regular purchases, bank transfer is the most economical method.

Bitcoin (BTC) is the first and largest cryptocurrency by market cap. It's considered "digital gold" — a store of value with limited supply of 21 million units, decentralized.

Altcoins (all cryptos other than BTC) have different characteristics: Ethereum (smart contracts), Solana (speed), stablecoins (stable value), etc.

Bitcoin is generally considered the most "conservative" investment in the crypto world for its history, liquidity, and institutional adoption.

2FA is mandatory to protect your account. Here's how to enable it:

1. Download an authenticator app: Google Authenticator or Authy
2. Log into your exchange account security settings
3. Select "Enable 2FA" or "Authenticator App"
4. Scan the QR code with the app
5. Enter the 6-digit code generated by the app to confirm
6. Save your backup codes offline — essential if you lose your phone

⚠️ Avoid SMS 2FA — it's vulnerable to SIM swapping attacks.

For small amounts it can be convenient, but for significant sums, a personal wallet is advisable. The golden rule of crypto: "Not your keys, not your coins".

Risks of keeping crypto on exchanges:

• Exchange hacks (e.g., Mt.Gox 2014, FTX 2022)
• Withdrawal freezes during market stress
• Exchange insolvency

Major exchanges like Binance and Coinbase have partial insurance on funds, but maximum security means keeping Bitcoin on a personal hardware wallet.

A seed phrase (or recovery phrase) is a sequence of 12-24 words that forms the master backup of your crypto wallet. Whoever has the seed phrase controls all wallet funds.

Essential rules:

• ❌ Never photograph it with your smartphone
• ❌ Never save it in digital files, email, or cloud storage
• ❌ Never share it with anyone (not even exchange support)
• ✅ Write it down by hand on paper or metal
• ✅ Store it in a secure physical location (safe, bank)
• ✅ Make multiple copies in different locations (against fire/floods)

A hardware wallet is a physical device (like a USB stick) that stores private keys offline, never exposing them to the internet.

Most reliable options: Ledger (Nano S Plus, Nano X) and Trezor (Model T, Safe 3).

When it's worth using:

• You have more than €1,000-2,000 in crypto
• You want to hold Bitcoin long-term (HODL)
• You want maximum security against hacks and phishing

Cost: €50-200. A reasonable investment for significant assets.

FTX's collapse in 2022 demonstrated that even large exchanges can fail. In case of insolvency:

• Funds on the exchange can be locked for months or years
• Recovery is partial (FTX creditors recovered a portion after 2+ years)
• There is no FDIC-like protection as in traditional banking

Largest exchanges (Binance, Coinbase) have emergency funds (SAFU for Binance), but the most effective guarantee remains keeping Bitcoin on a personal wallet.

Blockchain is a distributed, immutable digital ledger recording all Bitcoin transactions. Imagine a shared ledger used by thousands of computers worldwide, where each "block" contains a group of transactions and each block is linked to the previous one.

Key characteristics:

• Decentralized: no central authority controls the blockchain
• Immutable: recorded transactions cannot be deleted or altered
• Transparent: anyone can verify any historical transaction
• Secure: protected cryptographically and by miners' computational power

Bitcoin uses asymmetric key cryptography:

• Public key → generates your Bitcoin address (like an IBAN). You can share it freely to receive funds.
• Private key → is the digital signature authorizing transactions. It's like your bank PIN: never share with anyone.

If you lose your private key, you lose access to your Bitcoin forever. If someone obtains your private key, they can steal all your funds.

Halving is an event programmed into Bitcoin's code that halves the miners' reward every 210,000 blocks (about every 4 years).

History of halvings:

• 2009: reward 50 BTC per block
• 2012 (first halving): 25 BTC
• 2016 (second halving): 12.5 BTC
• 2020 (third halving): 6.25 BTC
• 2024 (fourth halving): 3.125 BTC

Halving reduces new Bitcoin supply, creating deflationary pressure. Historically preceded Bitcoin's major bull markets.

DeFi (Decentralized Finance): ecosystem of financial services (lending, exchanges, insurance) operating on blockchain without centralized intermediaries. Primarily on Ethereum.

Staking: lock your crypto to support a Proof-of-Stake blockchain (like Ethereum, Solana) and earn returns. It's the mechanism these blockchains use to validate transactions.

Yield Farming: provide liquidity to DeFi protocols in exchange for returns. More risky than traditional staking — exposed to smart contract risks and impermanent loss.

Spot trading: you buy and sell crypto at current market price. You own the asset physically. Risk = you only lose what you invest. Ideal for beginners.

Futures (derivatives): contracts letting you speculate on a crypto's future price, often with leverage. With 10x leverage, €100 controls €1,000 of position. You can earn more but can also lose more than initial capital (liquidation).

⚠️ Futures are high-risk instruments suited only for experienced traders.

• Market order: buy/sell immediately at current market price. Fast but you may pay more than expected in volatile markets (slippage).
• Limit order: set the maximum price you'll pay (or minimum to sell). Executes only when market reaches that price. More precise but might not execute.
• Stop-loss: automatic order that sells when price drops to a level, limiting losses.
• Take-profit: automatically sells at a target price, securing gains.

DCA is an investment strategy buying a fixed amount of Bitcoin at regular intervals (e.g., €100 weekly), regardless of market price.

Benefits:

• Reduces volatility impact — sometimes you buy high, sometimes low, but average price tends favorable over time
• Eliminates timing stress
• Disciplined and automatable
• Historically very effective for Bitcoin long-term

You can set automatic DCA on Binance (Recurring Buy) or Coinbase (Invest Periodically).

• FOMO (Fear Of Missing Out) — fear of missing opportunity. Leads to buying at market peaks. Avoid.
• HODL — "Hold On for Dear Life". Strategy of holding Bitcoin long-term without selling during market corrections.
• DYOR (Do Your Own Research) — "Do Your Own Research". Don't blindly trust others' advice, verify information.
• FUD (Fear, Uncertainty and Doubt) — negative or alarming news (often exaggerated) creating market panic.
• ATH (All-Time High) — highest price ever reached by a crypto.
• Rekt — slang for "liquidated" or "lost everything". Avoid!

Yes, with full transparency. BitcoinMarket.net is an informational site participating in affiliate programs with crypto exchanges. When you register via our links, we receive a commission from exchanges.

This costs you nothing extra. Read our Affiliate Disclosure for all details.

No. All BitcoinMarket.net information is purely informational and educational. It does not constitute financial, tax, or legal advice.

Before investing in cryptocurrencies, we recommend:

• Do your own research (DYOR)
• Consult a qualified financial advisor
• Invest only what you can afford to lose

Read our full Disclaimer.

For questions, error reports, or partnership requests, you can contact us through the channels indicated on the site. We respond within 48 business hours.